Nothing says a 3 day weekend is over like some math! 

If you’ve been a long time reader of this newsletter you may remember that I’ve written about financial statistics in the past, but it has been a long time and a lot has changed in the economy so I want to revisit some of my favorite (aka not favorite) economic metrics. 

In honor of Labor Day, I’m revisiting our old friend: Unemployment.

Last Friday the national jobs report came out. In a lot of ways the numbers were sort of same old same old as the last couple months. The August highlights were: 

• Employers added 187,000 jobs 

• The unemployment rate rose from 3.5% to 3.8% 

• Hourly earnings rose 4.3% over the month

• In general, hiring weakened over the summer (as in employers aren’t feeling the need to hire as much/as quickly)

The one highlight I want us to focus on today is that second bullet point -- the unemployment rate. I think most folks assume that that number includes everyone who is unemployed and would like to be employed. This would likely include folks who work part-time, but who would like to work full-time and those who are freelance who don’t have gigs right now. That makes sense! Unfortunately, that isn’t how the Bureau of Labor Statistics calculates the rate. This particular indicator is referred to as the U-3 unemployment rate and only counts folks who are: 

1. Available to work 

2. Actively seeking work

3. Are furloughed

It does not include folks who are: 

1. Working part-time, but want to work full-time

2. Underemployed

3. Work 15+ hours/week of unpaid “family work”

4. No longer looking for a job because they haven’t been able to find one in a long time (this is referred to as “out of the labor market” by the Bureau of Labor Statistics. 

I always find the details of the rate to be pretty mind blowing -- they are missing so many people in the count! It makes the economy look better than it is in reality for many people. It also makes sense why folks feel like the economy isn’t doing as well as the numbers may say. 

So, what is a more helpful indicator to look at? 

The Bureau of Labor Statistics actually has another version of the unemployment rate called the U-6 that I find really helpful. The U-6 includes people who are “marginally attached to the labor force” and who are working part-time, but want to work full-time. Note: marginally attached includes folks who have given up searching for a job. 

The August, 2023 US U-6 unemployment rate was 7.2% -- almost twice the U-3 rate. The last time I looked at this rate for the newsletter was 3 years ago. Then, in August of 2020, the U-3 rate was 10.2% and the U-6 rate was 16.5%. 7.2% is way better than both of those! And while that is true, I still wish the powers that be, namely politicians and the media outlets that report on these statistics, would share a more thorough and nuanced understanding of the indicators because without clear definitions and details we miss the real story. 

Yes - the unemployment rate has improved since the height of the pandemic. That IS good, but the real story is that there are still over 7% of Americans who would like to work more than they are. And that doesn’t even begin to touch wages, work-life balance, job satisfaction, or inflation. The unemployment rate alone - regardless of whether you are looking at the U-3 or U-6 rate doesn’t really tell us what is happening in the economy -- it is just a snapshot of one piece of the puzzle and I sure wish politicians would stop using it as a badge of honor or weapon when most Americans just want to feel secure, be able to spend quality time outside of work, and spend money in alignment with their goals without feeling financially terrified.

As always, I’m rooting for you.

XOXO,

P.S. I have a few open coaching spots for the fall! You can book a free consultation call with me, fill out the client inquiry form, or check out the Verdi website if you want to learn more.

My job is to make them Empowering

Many of my clients can be put in one of two buckets: 

1 - The “I’ve tried to do this for ages on my own and I just keep getting stuck/overwhelmed/frustrated/off course” bucket

OR

2 - The “I’ve never even tried because numbers and math feel so overwhelming to me” bucket

There is no moral superiority to either bucket. They both are honest places to be starting from and, quite frankly, very understandable places to be. Very few of us are taught about money in ways that are productive or helpful, either from a personal or business finance perspective. Many of us, especially women and those who consider themselves in creative fields, have been told and tell ourselves that we’re not good at math and therefore can’t be good with money. The financial and banking industries have historically benefitted from consumers being in the dark and therefore haven’t tried to make things easier. There are direct and ripple effects from systemic racism, sexism, and classism that mean that some folks are at an extreme advantage and some are at an extreme disadvantage. 

All of that is true and I still firmly believe that everyone can gain confidence with making financial decisions. No one is inherently “bad with money”. Every business owner or nonprofit Executive Director can learn the skills and facts they need to make critical financial decisions for their organization. Every individual can learn the skills and facts they need to make income, spending, saving, and investing decisions that enable them to work towards their goals. Sometimes the answer might be, “that isn’t possible yet or on the timeline you want”. Sometimes the answer is “that isn’t possible at all”, but questions can and should be asked and answered because otherwise we are flying blind and anytime we do that we are much more likely to crash. 

That’s where I come in. Or rather, that’s why my profession exists. I work with folks to first identify their goals, then determine which challenges (whether emotionally based or numbers based, or both!) are creating roadblocks, and, finally, create projections, toolkits, and plans for how to work through the challenges. Basically, I help you look at the numbers in a way that feels empowering and not overwhelming. I structure the numbers so that they tell a story that is actionable and manageable. I narrow in on what inputs impact the goals and work so that we don’t waste our time on things that simply distract us. 

This might look like: 

• Projecting out expenses and income over the next year to create a savings plan for a business runway

• Analyzing inventory and sales trends to create buying and pricing plans that maximize highly profitable sales 

• Creating a debt elimination plan that minimizes emotional stress and interest payments 

• Determining account and bookkeeping systems that enable you to minimize work time related to your administrative tasks while keeping on top of your financial realities 

If you’re interested in becoming a client - and I hope you are! - I have several spots opening up this month and several more opening up next month and I’d love to help you reach your financial goals! To learn more about my coaching services and pricing go here. To schedule a free consultation call with me go here and to chat via email, shoot me a message at caroline@verdiadvising.com. I can’t wait to help you find the joy and empowerment in the numbers! 

As always, I’m rooting for you. 

XOXO, 

P.S. Curious how people feel about working with me? Here’s a recent testimonial from one client: 

Working with Caroline was exactly what I was looking for: Someone who understood my financial needs & goals - and was willing to take into account my own values and perspectives on money - to help me build solutions that worked for me and my family. With Caroline, I felt like I could be honest and open around a touchy subject and could confide in her without judgment. After several sessions with Caroline, I'm feeling much more in control of my financial system, set up to head out on mat leave, and have a good sense of what my budget will look like over the course of the next few years. I have not hesitated to recommend Caroline to others and am planning to work with her again if I'm coming across another next big life stage change. Thank you so much, Caroline!

- Emma